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Applying Credits to Invoices in QuickBooks

Posted by Dave Dunn on July 25, 2008 | 0 Comments

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When a customer has a credit balance because they overpaid on a prior invoice or because you created a credit memo for some other reason, you can apply this credit balance to new invoices when you create them or when you receive payment against them. Instructions for both follow:

Applying Credit Balances to New Invoices:

Create the invoice in QuickBooks and then click Apply Credits.

In the QuickBooks Apply Credits window, select the credit(s) you wish to apply to the invoice. In the upper right QuickBooks shows you the original amount of the invoice, the credits used and the balance due. Click Done when finished.

Back on the invoice, you can now see the amount of payments applied and the balance due. Click Save & Close or Save & New.

By the way, if you don't notice the credits and therefore don't apply them, QuickBooks will remind you they are available when you save the invoice with a popup window (assuming you have not previously asked QuickBooks not to remind you).

Applying Credit Balances When You Receive Payment

If you don't apply the credits when you create the invoice in QuickBooks, you can do so when you receive payment. In the Receive Payments window, simply click on Discount & Credits.

In the QuickBooks Discount and Credits window, select the credit(s) you wish to apply to the invoice. In the upper right QuickBooks shows you the original amount of the invoice, the credits used and the balance due. Click Done when finished.

Back in the Receive Payments window, you can now see the amount of payments applied and the balance due. Click Save & Close or Save & New.

I generally recommend people apply credits as soon as they are aware of them. Therefore, if you know about them when creating the invoice, apply them when creating the invoice. If you create the credits after creating the invoice, apply them when receiving payment.


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